Huge U.S. technology companies that soared amid an artificial intelligence frenzy last year are getting pummeled after a little talked about Chinese startup demonstrated a chatbot that it says rivals versions from OpenAI and Google, and for a fraction of the cost.
Chipmakers Nvidia and Broadcom both suffered double-digit percentage declines after the exhibit from China’s DeepSeek. Software giant Oracle, a central player in the Trump administration’s recently announced $500 billion AI partnership, tumbled 8%. Microsoft slid 3.8% and Amazon fell 3.3%. Google parent company Alphabet and Facebook parent Meta each lost about 3.5%.
Those companies have had a growing impact on the fate of U.S. markets, which slumped Monday.
Futures for the S&P 500 sank 2.1% before the bell, while futures for the technology-heavy Nasdaq tumbled 3.8%. Futures for the Dow Jones Industrial Average declined 0.7%.
Analyst Dan Ives of Wedbush Securities said that while the China’s DeepSeek AI technology is impressive, the U.S. tech sector is still far ahead of China with regard to AI infrastructure.
“Launching a competitive (la